Meralco Advances Strategic Investments for a Stronger Energy Future

The potential impact of El Niño and rising temperatures is expected to put additional pressure on electricity demand, as households and businesses increase their use of cooling equipment. This comes at a time when the global energy landscape continues to face significant challenges.

Beyond the Philippine borders, geopolitical tensions continue to disrupt fuel supply chains, drive volatility in international markets, and heighten concerns over energy security.

As the country relies heavily on imported fuels to meet its energy requirements, it remains exposed to fluctuations in global commodity prices and potential supply disruptions. These pressures are compounded by growing domestic electricity demand, making the availability and affordability of power increasingly important to households and businesses.

For Manila Electric Company (Meralco), it is imperative to continue delivering stable and reliable electricity to its close to 8.4 million customers, as it fortifies diversified business portfolio to sustain growth.

Through its steady core distribution utility business and growing power generation and retail electricity supply portfolios, the Manuel V. Pangilinan-led energy company is advancing strategic investments that support the requirements of its customers today while preparing for what they will need in the future.

Meralco continues to reinforce its operational foundations while pursuing a more resilient energy business with consolidated capital expenditures (CAPEX) reaching P76 billion as of end-September 2026, supporting its distribution network, renewable energy developments, and emerging energy technologies.

These investments build on the company’s existing strengths, with a focus on balancing reliability, affordability, and sustainability amid a changing energy landscape.

“While global uncertainties continue to put pressure on fuel supply and prices, Meralco’s diversified portfolio continues to give us greater strength and flexibility to navigate the challenges,” Meralco Chairman Manuel V. Pangilinan said.

“The first nine months of 2026 underscored the importance of vigilance and adaptability amid a challenging operating environment marked by persistent geopolitical tensions and the effects of a strong El Niño. Despite these headwinds, Meralco has remained focused on ensuring reliable service to our customers, strengthening energy security, and supporting communities within and beyond our franchise area,” he said.

Strengthening network reliability through strategic investments

Meralco continues to invest in the expansion, upgrading, and modernization of its distribution network as part of its ongoing efforts to strengthen system reliability and meet the evolving needs of its customers. These investments are particularly important as the power sector prepares for the anticipated impact of El Niño and the resulting increase in electricity demand.

“We are prepared to manage the potential impact of El Niño and other severe weather disturbances on our operations. While working closely with the Department of Energy (DOE) and relevant government agencies to monitor developments and manage expected increase electricity demand, we assure our customers that Meralco has secured sufficient power supply to meet their requirements. Likewise, we continue with the proactive maintenance, upgrading, and strengthening of our distribution facilities that are critical in ensuring safe, stable, and reliable service, even under challenging operating conditions," Meralco Executive Vice President and Chief Operating Officer Ronnie L. Aperocho said.

During the third quarter, Meralco commissioned three major CAPEX projects designed to enhance system reliability, increase network capacity, and provide greater operational flexibility.

These include the deployment of the Philippines' first 34.5-kilovolt (kV) mobile switchgear, which allows the company to undertake critical substation upgrades and equipment replacements while minimizing service disruptions. Currently deployed at the Sun Valley Substation in Parañaque City, the mobile switchgear temporarily serves three feeders during the replacement of existing equipment.

Meralco also energized the Makban–Los Baños-Batangas Paper Corp. (BPC) 69-kV line, which involved the construction of 1.45 kilometers of new line and the replacement of aging circuit breakers and disconnect switches at the NGCP Makban Substation. The new line provides greater operational flexibility and helping strengthen the reliability of electricity service in the area, benefitting key customers including the University of the Philippines Los Baños (UPLB), Forest Products Research and Development Institute (FPRDI), Ecosystems Research and Development Bureau (ERDB), and International Rice Research Institute (IRRI), among others.

Another major project was the expansion of the Commonwealth Substation in Quezon City through the installation of a second transformer bank, featuring a new 83-megavolt-ampere (MVA) power transformer and 34.5-kV gas-insulated switchgear (GIS). The additional capacity supports growing electricity requirements in the area, including those of major establishments such as the MRT-7 project, Maynilad Water Services Inc., and the House of Representatives.

These investments, together with Meralco's continuing network modernization and anti-pilferage initiatives, have helped sustain low system losses, with feeder loss at 4.45% as of end-September, well below the Energy Regulatory Commission's (ERC) allowable cap. They have also contributed to improvements in the distribution utility's operational performance, as reflected in key reliability metrics.

Meralco’s System Average Interruption Frequency Index (SAIFI) -- which measures the average number of power interruptions per customer – was only at 0.701 time as of end-September, down 8% year-on-year; while its System Average Interruption Duration Index (SAIDI) -- or the average duration of interruptions per customer – was at 74.129 minutes, similarly down 8% from a year ago.

Expanding generation capacity through a diversified energy portfolio

Meralco, through its power generation arm Meralco PowerGen (MGEN), is also aggressively expanding its generation portfolio through investments in renewable energy and emerging power technologies, supporting the country's evolving energy requirements while strengthening its long-term position in the sector.

A major milestone in this effort is the commercial operations of MTerra Solar, which has begun supplying 600 MWac of mid-merit capacity to Meralco under a 20-year Power Supply Agreement (PSA) approved by the Energy Regulatory Commission (ERC). From groundbreaking in November 2024 to the start of commercial operations in August 2026, the facility's rapid development underscores the accelerating deployment of large-scale renewable energy projects in the Philippines.

The contribution of MTerra Solar helped drive MGEN's renewable energy business to deliver 1,634 gigawatt-hours (GWh) as of end-September, nearly three times its output in the previous year. The additional capacity marks a significant expansion of MGEN's renewable energy portfolio and reinforces its role in supporting Meralco's power supply requirements.

Beyond renewable energy, MGEN is also exploring nuclear power as a potential addition to the country's future energy mix. The company has partnered with U.S.-based engineering firm Sargent & Lundy and local engineering company AMH Philippines, Inc. to undertake a comprehensive feasibility study on small modular reactors (SMRs), supported by a US$2.8-million technical assistance program from a U.S. government agency. The study will help evaluate the viability of SMR technology and its potential role in the Philippines' energy future.

MGEN is likewise advancing investments in next-generation power technologies beyond the Philippines. Its Singapore-based subsidiary, PacificLight Power Pte. Ltd. (PacificLight), has broken ground on a S$1.2-billion hydrogen-ready power plant on Jurong Island. Developed by its wholly owned subsidiary, PLM Power Pte. Ltd., the 670-MW facility will be Singapore's first integrated gas turbine power plant with large-scale battery energy storage. Expected to commence operations in 2029, it is set to become Singapore's largest and most efficient single generating unit upon completion.

“MGEN’s nine-month performance reflects our continued commitment to delivering reliable power while advancing the country’s energy transition. At the same time, we continue to pursue operational efficiencies, optimize our generation portfolio, and explore cost-effective energy solutions to help mitigate upward pressures on electricity prices while maintaining the reliability of supply. As we advance projects such as MTerra Solar and explore new technologies and strategic partnerships, we remain focused on balancing affordability, reliability, and sustainability in meeting the country’s evolving energy needs,” MGEN President and CEO Emmanuel V. Rubio said.

Advancing sustainability and creating lasting community impact

Beyond strengthening its energy business, Meralco continues to advance its sustainability agenda, balancing the transition to a low-carbon future with the need to maintain energy security, affordability, and reliability while creating meaningful social impact.

The company's Long-term Sustainability Strategy (LTSS) gained international recognition at the 2026 United Nations Private Sector Forum, where Meralco was the lone Philippine and ASEAN energy sector representative. The strategy was recognized for its pragmatic approach to advancing a low-carbon future while keeping energy security, affordability, reliability, and social impact at the center of the energy transition.

Meralco also received 10 distinctions at the 2026 International Business Awards, including four recognizing its sustainability leadership and environmental, social, and governance (ESG) initiatives. These included a Gold Stevie for Sustainability Hero of the Year and Silver Stevies for its sustainability agenda, “Powering the Good Life”; its Mbrace Diversity and Inclusion program; and the One Meralco 2024 Integrated Report. The company was also named the first-ever Emerging Changemaker of the Year at the 5th Bahaghari Awards for advancing inclusion through Mbrace. Meanwhile, MGEN received two Silver Awards at the 2026 Inquirer ESG Edge Impact Awards for its renewable energy development and community engagement initiatives.

These sustainability commitments are also reflected in the community programs of One Meralco Foundation (OMF), which continues to expand access to electricity and clean energy among underserved communities. During the period, OMF energized 2,053 low-income households across Metro Manila and parts of Batangas, Bulacan, Cavite, and Laguna.

It also brought solar power to three public schools in Rizal and South Cotabato, benefiting 11,132 students; installed 100 solar-powered streetlights in Koronadal; energized a water facility serving 259 households in Occidental Mindoro; and distributed 120 solar lamps to students and farmers in Ifugao. These initiatives help extend the benefits of clean and accessible energy to communities, schools, and households.

OMF likewise continued its environmental and education programs. Through One For Trees, the Foundation planted an additional 1,000 native trees in Laguna and continued nurturing 3.04 million trees across 36 reforestation sites nationwide. Its back-to-school initiatives also provided more than 6,000 school kits to students in 78 public schools. Within Meralco's franchise area, OMF implemented 23 community relations projects and distributed nearly 6,000 relief packs and 200 solar lamps to families affected by disasters.

Complementing these efforts, MGEN and OMF committed P20.3 million to community development programs in the host communities of MGEN Thermal and MGEN Renewables across Luzon and Visayas for 2026. MGEN Thermal also provided medicines and medical supplies to 33 health centers in Cebu, Iloilo, and Aklan through its Adopt-a-Health-Center project, while supporting 452 scholars through tuition assistance, allowances, school supplies, and uniforms.

MGEN further strengthened its commitment to education through a partnership with Mano Amiga Academy, supporting improvements in students' learning environments through classroom furniture and learning instruments, facility repairs, and ground maintenance.

Greater regulatory certainty paves the way for future investments

After more than 11 years without a completed rate reset, Meralco has reached a significant regulatory milestone with the approval of its application for the First Regulatory Period (1RP), providing greater certainty for its long-term investment plans.

On October 26, 2026, the company received the Energy Regulatory Commission's (ERC) Decision on its Application for the Annual Revenue Requirement and Performance Incentive Scheme for the 1RP, covering July 1, 2026 to June 30, 2030. The Decision approved an average distribution tariff of P1.50 per kilowatt-hour (kWh), marking the completion of Meralco's long-delayed rate reset process.

More than just a regulatory milestone, the approval provides a clearer framework for Meralco to plan and implement priority projects that will strengthen network reliability, modernize facilities, and accelerate digitalization. These investments are essential to keeping pace with rising electricity demand and the evolving requirements of its 8.4 million customers.

“We will continue to pursue investments that address today's requirements while positioning our businesses for long-term growth. The ERC's approval of our long-delayed rate reset marks an important milestone, providing greater regulatory certainty to advance critical investments in network reliability, modernization, and digitalization. We remain confident in One Meralco's long-term growth prospects and in our ability to deliver sustained value through disciplined execution and strategic investments,” Pangilinan said.